Dechert has helped DHL Express GmbH dramatically reduce a $30.5 million jury verdict stemming from its 2008 decision to pull out of the domestic shipping market.

The U.S. Court of Appeals for the Tenth Circuit ruled June 4 that DHL did not act in bad faith when it informed Unishippers Global Logistics LLC of its plan to stop domestic service. That ruling knocks out $25 million of a $30.5 million verdict that Unishippers won against DHL in 2011.

Unishippers, which provides logistical support for businesses, had used DHL as its exclusive shipping carrier. The companies made plans to continue that arrangement until 2017. In 2008, an ailing DHL began scaling back its domestic shipping operations. Unishippers renegotiated its contract so that DHL would no longer be its exclusive shipper. Crucially, both DHL and Unishippers would be free to terminate the arrangement for any reason, provided they gave 180 days’ notice.

Shortly after signing that deal, DHL ceased all domestic shipping and severed ties with Unishippers. The logistics company sued DHL in 2008, alleging it breached the 180-day notice requirement.

DHL argued that even if it failed to give adequate notice, damages should be limited to the 180-day notice period. A Salt Lake City jury disagreed. It found that DHL misrepresented its business plans and therefore should be estopped from limiting damages to that period. The jury calculated damages through 2017, which worked out to about $28 million. The jury tacked on another $2.5 million for another contractual breach.

In the June 4 ruling, the Tenth Circuit reversed the finding of bad faith and limited "notice damages" to the 180-day period. In total, Unishippers now stands to collect about $5 million.

"We cannot locate sufficient factual basis for the proposition that Unishippers was induced into entering into the [2008] agreement by misrepresentation or that Unishippers relied on supposed lies told by DHL," the court found.

Dechert partner Edwin Woodsome said the ruling is a vindication of DHL’s argument that its arrangement with Unishippers was an arm’s-length deal.

Utah firm Jones Waldo Holbrook & McDonough represented Unishippers. Partner Timothy Houpt was not immediately available for comment.

Jan Wolfe is a reporter for The American Lawyer, a Legal affiliate based in New York. This article first appeared on The Am Law Litigation Daily at www.americanlawyer.com. •